====== Rose Blumkin ======
Rose Blumkin (often known as "Mrs. B") was a legendary American businesswoman and the founder of [[Nebraska Furniture Mart]], one of the largest home furnishing stores in the United States. While not an investor in the traditional sense of buying stocks, her life is a powerful case study for anyone interested in [[value investing]]. Her story is celebrated by [[Warren Buffett]], who acquired her business for [[Berkshire Hathaway]] in 1983 and frequently holds her up as the epitome of a brilliant manager and business owner. Born in Russia in 1893, she immigrated to the U.S. without knowing English and with virtually no money. Through sheer determination, business savvy, and an unwavering commitment to her customers, she built a retail empire from scratch. Her principles of honest dealing, rock-bottom pricing, and relentless work ethic provide timeless lessons on how to identify and appreciate truly great businesses—the cornerstone of successful long-term investing.
===== The Mrs. B Story: A Masterclass in Business =====
Mrs. B's journey is the stuff of American legend and a treasure trove of business wisdom. Her life demonstrates how a simple, powerful idea, executed with relentless passion, can create enormous value.
==== The Founding of Nebraska Furniture Mart ====
In 1937, Rose Blumkin started her business in the basement of her husband's pawn shop in Omaha, Nebraska, with a $500 loan from her brother. Her business philosophy was simple but radical for the time: **"Sell cheap and tell the truth."** She stacked her merchandise high, kept her overheads razor-thin, and passed the savings on to her customers. While established competitors tried to strong-arm suppliers into not selling to her, she would travel to other cities, buy from other retailers, and still sell for less back in Omaha. This customer-first approach built an unshakeable foundation of trust and loyalty.
==== The Famous Handshake Deal with Warren Buffett ====
By the early 1980s, Nebraska Furniture Mart was a retail juggernaut ringing up hundreds of millions in sales, all without a shred of debt. Warren Buffett, a fellow Omaha resident, was so impressed that he decided he had to own the business. In 1983, he approached Mrs. B, then 89 years old, to buy the company.
The negotiation was legendary for its simplicity. Buffett asked for her price. She gave him a number. He said, "We'll take it." The entire deal for a 90% stake (valued at roughly $60 million) was sealed on a handshake and a two-page contract, with no audits or financial due diligence. Buffett trusted Mrs. B's character and the business's reputation completely. He later famously said he would **"rather wrestle grizzlies"** than compete with Mrs. B and her family, a testament to the powerful economic [[moat]] she had built.
==== The "Retirement" and Comeback ====
Mrs. B finally agreed to retire at the age of 95. However, retirement didn't suit her. After clashing with her grandsons over the management of the store, she did the unthinkable. At age 95, she quit in frustration and, using her life savings, opened a new store called "Mrs. B's Clearance and Factory Outlet" right across the street. Her new venture quickly became the third-largest carpet retailer in Omaha, directly competing with the business she had sold to Buffett. A few years later, an amused and exasperated Buffett bought her out a second time. She continued working at the store until she was 103, a true icon of entrepreneurial spirit.
===== Investment Lessons from Mrs. B =====
For investors, Mrs. B's story is not just inspiring; it's a practical guide to identifying wonderful businesses. Her principles are directly aligned with the core tenets of value investing.
  * **Look for Fanatical Owner-Operators:** Mrs. B wasn't just an employee; the business was her life's work. When you invest, seek out companies led by founders or managers who have a deep, personal stake in the outcome. They think in decades, not quarters, and treat shareholders' money as their own.
  * **A Moat is Built on Trust, Not Just Price:** Her motto, "Sell cheap and tell the truth," created more than just low prices. It created a powerful [[competitive advantage]] rooted in absolute customer trust and [[brand loyalty]]. When analyzing a company, look beyond the numbers to understand the source of its moat. Is it a beloved brand? A sterling reputation? These are invaluable assets.
  * **Focus on Simple, Understandable Businesses:** Mrs. B stuck to what she knew: furniture and home goods. She didn't get distracted by fads or complex ventures. This mirrors the advice of investors like [[Peter Lynch]] to "invest in what you know." The best businesses are often the ones you can easily understand and explain.
  * **Management Integrity is a Priceless Asset:** The Buffett-Blumkin handshake deal is the ultimate lesson in the value of integrity. Buffett didn't need to audit her books because he knew her character was unimpeachable. When evaluating an investment, the quality, honesty, and drive of its management team are arguably the most important factors for long-term success.